UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
PERIOD FROM TO
-------- --------
COMMISSION FILE NUMBER 1-10006
FROZEN FOOD EXPRESS INDUSTRIES, INC.
(Exact name of registrant as specified on its charter)
Texas 75-1301831
(State or other jurisdiction of (I.R.S. Employer
organization) Identification no.)
1145 Empire Central Place
Dallas, Texas 75247-4309
(Address of principal executive offices) (Zip code)
(214) 630-8090
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days.
[x] Yes [ ] No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12B-2 of the Exchange Act).
[ ]Yes [x] No
As of May 5, 2003, 16,934,000 shares of the registrant's common stock, $1.50
par value, were outstanding.
INDEX
PART I - FINANCIAL INFORMATION
---------------------- Page No.
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Item l. Financial Statements
Consolidated Condensed Balance Sheets -
March 31, 2003 and December 31, 2002 2
Consolidated Statements of Income -
Three months ended March 31, 2003 and 2002 3
Consolidated Condensed Statements of Cash Flows -
Three months ended March 31, 2003 and 2002 4
Notes to Consolidated Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 10
Item 4. Controls and Procedures 10
PART II - OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K 10
PART I - FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
--------------------
FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
(Unaudited)
Mar. 31, Dec. 31,
2003 2002
Assets ---- ----
Current assets
Cash and cash equivalents $ 4,268 $ 2,861
Accounts receivable, net 48,239 45,345
Inventories 8,049 7,024
Tires 5,013 5,113
Deferred federal income tax 1,743 1,542
Other current assets 7,601 6,382
------- -------
Total current assets 74,913 68,267
Property and equipment, net 54,675 57,462
Other assets 11,248 11,857
------- -------
$140,836 $137,586
======= =======
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 26,621 $ 20,315
Accrued claims liabilities 5,065 7,639
Accrued payroll 4,198 4,068
Capital lease obligations 2,335 2,562
Accrued liabilities 2,199 2,331
------- -------
Total current liabilities 40,418 36,915
Long-term debt 8,000 6,000
Accrued claims and other 14,445 16,121
------- -------
62,863 59,036
------- -------
Shareholders' equity
Common stock 25,921 25,921
Paid-in capital 2,300 2,569
Retained earnings 52,911 53,579
------- -------
81,132 82,069
Less - Treasury stock 3,159 3,519
------- -------
Total shareholders' equity 77,973 78,550
------- -------
$140,836 $137,586
======= =======
See accompanying notes.
FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per-share amounts)
(Unaudited)
For the Three Months
Ended March 31,
--------------
2003 2002
---- ----
(Restated)
Revenue
Freight revenue $88,521 $77,468
Non-freight revenue 2,933 1,589
------ ------
91,454 79,057
------ ------
Costs and expenses
Freight operating expenses
Salaries, wages and related expenses 23,778 22,203
Purchased transportation 21,734 17,344
Supplies and expenses 26,455 22,400
Revenue equipment rent 6,678 7,312
Depreciation 3,512 2,770
Communications and utilities 1,073 942
Claims and insurance 2,991 3,590
Operating taxes and licenses 1,074 998
Miscellaneous expense 1,137 199
------ ------
88,432 77,758
Non-freight costs and operating expenses 3,528 2,112
------ ------
91,960 79,870
------ ------
Loss from operations (506) (813)
Interest and other expense, net 363 571
------ ------
Loss before income tax (869) (1,384)
Income tax benefit (201) (440)
------ ------
Net loss $ (668) $ (944)
====== ======
Net loss per share of common stock
Basic $ (.04) $ (.06)
====== ======
Diluted $ (.04) $ (.06)
====== ======
Weighted average shares outstanding
Basic 16,706 16,474
====== ======
Diluted 16,706 16,474
====== ======
See accompanying notes.
FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
For the Three Months
Ended March 31,
--------------
2003 2002
---- ----
Net cash used in operating activities $(1,905) $(1,909)
------ ------
Cash flows from investing activities
Expenditures for property and equipment (2,494) (5,235)
Proceeds from sale of property and equipment 3,546 1,549
Life insurance and other 492 141
------ ------
Net cash provided by (used in) investing activities 1,544 (3,545)
------ ------
Cash flows from financing activities
Borrowings under revolving credit agreement 11,700 14,000
Payments against revolving credit agreement (9,700) (8,000)
Capital leases and other, net (232) -
------ ------
Net cash provided by financing activities 1,768 6,000
------ ------
Net increase in cash and cash equivalents 1,407 546
Cash and cash equivalents at January 1 2,861 3,236
------ ------
Cash and cash equivalents at March 31 $ 4,268 $ 3,782
====== ======
See accompanying notes.
FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
March 31, 2003 and 2002
(Unaudited)
1. BASIS OF PRESENTATION
---------------------
These consolidated financial statements include Frozen Food Express
Industries,Inc. and its subsidiary companies, all of which are wholly-
owned. All significant intercompany accounts and transactions have been
eliminated in consolidation. The financial statements included herein have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC"). In the opinion of management, all adjustments
(which consisted only of normal recurring accruals) necessary to present
fairly our financial position, cash flows and results of operations have
been made. Pursuant to SEC rules and regulations, certain information and
disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United
States of America, have been condensed or omitted from these statements
unless significant changes have taken place since the end of the most
recent fiscal year. We believe that the disclosures contained herein,when
read in conjunction with the financial statements and notes included, or
incorporatedby reference, in our Form 10-K filed with the SEC on March 28,
2003, are adequate to make the information presented not misleading. It
is suggested, therefore, that these statements be read in conjunction with
the statements and notes (included, or incorporated by reference), in our
most recent Annual Report on Form 10-K.
2. STOCK-BASED COMPENSATION
------------------------
In April of 2003, the Financial Accounting Standards Board ("FASB")
announced that it had voted to rescind the option that companies have to
apply APB Opinion No. 25 to account for stock options. The rescission
will come into effect at a future date which has not yet been determined.
Until such time as the new accounting standard takes effect, we will
continue to apply APB Opinion No. 25 to account for our stock options.
Accordingly, no expense has been recognized for stock option grants to
employees. The following table illustrates how our net loss and our
diluted net loss per share would have been impacted for each of the
three month periods ended March 31, 2003 and 2002 had we elected to
apply FASB Statement of Financial Accounting Standards ("SFAS") No. 123
to account for our stock options (in millions, except per-share amounts):
2003 2002
---- ----
(restated)
Net loss:
As reported $ 0.7 $ 0.9
Impact of SFAS No. 123 0.1 0.1
---- ----
$ 0.8 $ 1.0
==== ====
Net loss per share:
As reported $0.04 $0.06
Impact of SFAS No. 123 0.01 -
---- ----
$0.05 $0.06
==== ====
In calculating the above amounts we assumed that expenses from employee stock
options would accrue over each option's vesting period.
3. SHAREHOLDERS' EQUITY
--------------------
As of March 31, 2003 and December 31, 2002, respectively, there were
16,901,000 and 16,848,000 shares of stock outstanding.
4. COMMITMENTS AND CONTINGENCIES
-----------------------------
We have accrued for costs related to public liability, cargo and work-
related injury claims. When an incident occurs we record a reserve for
the incident's estimated outcome. As additional information becomes
available, adjustments are often made. Accrued claims liabilities in-
clude all such reserves and our estimate for incidents which have been
incurred but not reported.
5. EARNINGS PER SHARE
------------------
For the three months ended March 31, 2003 and 2002, respectively, we
excluded 189,000 and 15,000 common stock equivalents from diluted weighted
average shares because their inclusion would have been anti-dilutive.
6. OPERATING SEGMENTS
------------------
We have two operating segments. The larger segment consists of our motor
carrier operations, which are conducted in a number of divisions and
subsidiaries and are similar in nature. We report all motor carrier
operations as one segment.
Our non-freight segment is engaged in the sale and service of air con-
ditioning and refrigeration components. We have presented below financial
information for each of the three-month periods ended March 31, 2003 and
2002.
2003 2002
---- ----
(restated)
Freight Operations
Revenue $ 88.5 $ 77.5
Operating income(loss) 0.1 (0.3)
Total assets 140.2 130.5
Non-Freight Operations
Revenue $ 2.9 $ 1.6
Operating loss (0.6) (0.5)
Total assets 19.4 18.2
Intercompany Eliminations
Total assets $(18.8) $(15.6)
Consolidated
Revenue $ 91.5 $ 79.1
Operating loss (0.5) (0.8)
Total assets 140.8 133.1
7. PRIOR PERIOD RESTATEMENT
------------------------
In the fourth quarter of 2002, we identified certain expenses which
should have been included in, but were omitted from our operating
expenses during the first three quarters of 2002. We have reflected
the corrections of those omissions in our financial statements. For
the first quarter of 2002, we have reflected an increase of $130,000 in
our loss from operations to include payroll and other operating expenses
that should have been, but were not, recorded by our non-freight
subsidiary during that quarter. Similar adjustments of $149,000 and
$70,000 have been made to the second and third quarters of 2002,
respectively. Net of benefit from income taxes, the adjustments increased
our first quarter of 2002 net loss by $85,000 and reduced our net income
for the second and third quarters of 2002 by $97,000 and $45,000,
respectively.
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
- ---------------------
The following table sets forth, as a percentage of freight revenue, certain
major operating expenses for the three-month periods ended March 31, 2003 and
2002.
2003 2002
---- ----
Salaries, wages and related expenses 26.9% 28.7%
Purchased transportation 24.6 22.4
Supplies and expenses 29.9 28.9
Revenue equipment rent and depreciation 11.5 13.0
Claims and insurance 3.4 4.6
Miscellaneous and other 3.6 2.8
----- -----
Total freight operating expenses 99.9% 100.4%
===== =====
First Quarter of 2003 vs. 2002
- ------------------------------
During the first quarter of 2003, our freight revenue rose by 14.3% to $88.5
million. Fuel adjustment charges aggregated $4.2 million during the first
quarter of 2003 and about $0.5 million during the same period of 2002.
Excluding the impact of fuel adjustment charges, our full-truckload revenue
increased by 0.7%, to $57.3 million during the first quarter of 2003. This
resulted from a 4.2% increase in the number of shipments, which was offset by
a decrease in average length of haul. Our basic revenue per full-truckload
mile was essentially the same during both the first quarters of 2003 and 2002.
Less-than-truckload (LTL) revenue excluding fuel adjustment charges rose by
$7.0 million between the first quarters of 2002 and 2003. For decades, most of
the market for nationwide refrigerated LTL service has been shared between one
other company and ourselves. We competed primarily on price and breadth of
services. In recent years, the competitor's annual LTL revenue was about half
as much as our LTL revenue. During December 2002, competitor announced that it
planned to cease operations and liquidate, a process that began in January of
2003. As a result, we have experienced a significant increase in our LTL
volume of shipments. Although we expect this increased activity to carry over
into future periods, there can be no assurance that will occur.
Non-freight revenue aggregated 2.1% and 3.2% of total revenue during the first
three months of 2002 and 2003, respectively. The 2003 increase in non-freight
revenue was due to increased sales activity relative to automotive air
conditioning parts, improved performance of our international marketing
activities and our continuing efforts to liquidate excess inventory.
Although as of March 31, 2003 and 2002 we had about 1,295 tractors in our
company-operated full-truckload fleet, the number of tractors in the fleet has
declined by 44 trucks since the beginning of 2003. The number of full-truckload
tractors provided to us by owner-operators rose by about 20, during the first
quarter of 2003. At the end of 2003's first quarter, we had about 90 more
independent contractor-provided full-truckload trucks than we did one year ago.
Full-truckload activities, which contributed about 68% and 73% of freight
revenue during the first quarters of 2003 and 2002, respectively, are conducted
primarily with company-operated equipment, while LTL activities are conducted
primarily with equipment provided by owner-operators. Changes in the mix of LTL
versus full-truckload revenue as well as fluctuations in the amount of total
freight handled on company-operated versus owner-operator provided equipment,
impact the percent of freight revenue absorbed by the various categories of
operating expenses between the two quarters.
During the first quarter of 2003, the percent of freight revenue absorbed by
salaries, wages and related expense was 26.9%, as compared to 28.7% during the
year-ago quarter. Total salaries and wages rose by $1.6 million. Payroll
expenses related to drivers declined by about $200,000 between the quarters,
due to the reduction in our company-operated full-truckload tractor count.
Non-driver salaries and wages increased by about $750,000 due to the increase
in our LTL business and our continuing efforts to refocus our marketing
efforts. The remainder of the increase in salaries and related expenses is
due to increased costs associated with our group health and work-related injury
plans.
Purchased transportation, as a percent of freight revenue, rose from 22.4%
during the first quarter of 2002 to 24.6% during the comparable 2003 period.
The portion of freight revenue we paid to independent contractors for purchased
transportation, as a percent of revenue, has not changed appreciably since
last year. The increase in purchased transportation expenses during 2002 is
principally related to the higher volume of LTL activity, which is more
reliant on equipment provided by independent contractors than are our full-
truckload activities.
Supplies and expenses rose by $4.1 million between the first quarters of 2002
and 2003. More than 75% of this increase was related to fuel consumed by our
company-operated fleet. Per-gallon costs we paid for fuel rose by 38.5% during
the first quarter of 2003 as compared to 2002. During April of 2003, however,
fuel prices began to subside.
Sudden and dramatic fuel price volatility impacts our profitability. We have in
place a number of strategies designed to address such volatility. Pursuant to
the contracts and tariffs by which our freight rates are determined, those
rates automatically fluctuate as diesel fuel prices rise and fall. With regard
to fuel expenses for company-operated equipment, we attempt to mitigate the
impact of fluctuating fuel costs by purchasing more fuel-efficient tractors
and aggressively managing fuel purchasing. Also, owner-operators are
responsible for all costs associated with their equipment, including fuel.
Therefore, the cost of such fuel is not a direct expense of ours.
For the first quarter of 2003, the total of depreciation and revenue equipment
rent expense rose by $108,000 as compared to the first quarter of 2002. There
were 1,392 tractors in our company-operated fleets as of March 31, 2003, an
increase of about 20 as compared to one year before. The number of tractors
we own and lease to independent contractors increased by 120. Therefore, we
owned or were the lessee of about 140 more tractors as of March 31, 2003 than
was the case as of March 31, 2002. During the second half of 2002, we
extended lease agreements on a significant portion of our trailer fleet at
rentals as low as half of what we had been paying. Those reductions in
trailer rents served to reduce the impact of increased rent and depreciation
expenses associated with the increased size of our tractor fleet.
Claims and insurance expense fell from 4.6% of freight revenue during the
first quarter of 2002 to 3.4% for 2003. These expenses vary with the
severity and frequency of personal injury and property damage claims.
Because we retain a large deductible for our personal injury claims, the
occurrence of any single event can significantly impact our periodic earnings.
During the first quarter of 2002, we incurred losses of greater severity and
magnitude than we incurred during the first quarter of 2003. The presence
of the large deductible is likely to increase periodic volatility of our
claims and insurance expense.
Miscellaneous and other expenses increased by $938,000 between the quarters.
Legal fees associated with general corporate matters and increased accruals
for accounts receivable which may not ultimately be collected were the primary
reasons for this increase.
For the first quarters of 2003 and 2002, 118% and 64%, respectively, of our
consolidated operating loss was from our non-freight operations. Non-freight
revenue for the first quarter of 2003 was $2.9 million, an increase of $1.3
million from the first quarter of 2002, but operating expenses for our non-
freight segment increased by $1.4 million between the quarters. Our
continuing efforts to expand our presence in certain markets and to liquidate
excess and obsolete inventories are major contributors to our non-freight
operating expenses. We will continue to focus on and implement strategies to
restore the non-freight segment to profitability. If a suitable strategy
cannot be devised and implemented, we will take whatever additional actions
are required to address issues associated with our non-freight segment.
Our loss from operations was $506,000 during the first quarter of 2003 as
compared to an operating loss of $813,000 during the first quarter of 2002.
Primarily as a result of decreased expenses related to our life insurance
investments, interest and other expense, net, fell from $571,000 to $363,000
between the two quarters.
We incurred a pre-tax loss of $869,000 during the first quarter of 2003 as
compared to a pre-tax loss of $1,384,000 during the comparable 2002 period.
Our benefit from income tax was 23.1% of pre-tax income for the first quarter
of 2003 and 31.9% for the comparable period of 2002. Our effective tax rate is
impacted by the presence of expenses in our income statement which are not
deductible for federal income tax purposes.
Liquidity and Capital Resources
- -------------------------------
Our primary needs for capital resources are to finance working capital,
expenditures for property and equipment and, from time to time, acquisitions.
Working capital investment typically increases during periods of sales
expansion when higher levels of receivables and, with regard to non-freight
operations, inventory are present. We had long-term debt of $8 million as
of March 31, 2003. The unused portion of the company's $40 million revolving
credit facility was approximately $26 million.
During each of the three month periods ended March 31, 2003 and 2002, net cash
used in operating activities was $1.9 million.
We believe that our current cash position, funds from our operations, and the
availability of funds under our credit agreement will be sufficient to meet
anticipated liquidity requirements for the next twelve months. At March 31,
2003, working capital was $34.5 million as compared to $31.4 million at
December 31, 2002.
Internet Web Site
- -----------------
We maintain a web site on the Internet through which additional information
about us is available. Our web site's address is www.ffex.net. Our filings
pursuant to Section 13 or 15 (d) of the Exchange Act are available, free of
charge, through our web site shortly after they are filed.
Outlook
- -------
This report contains information and forward-looking statements that are based
on our current beliefs and expectations and assumptions we made based upon
information currently available. Forward-looking statements include statements
relating to our plans, strategies, objectives, expectations, intentions, and
adequacy of resources, and may be identified by words such as "will", "could",
"should", "believe", "expect", "intend", "plan", "schedule", "estimate",
"project" and similar expressions. These statements are based on current
expectations and are subject to uncertainty and change.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, actual results could differ materially from the
expectations reflected in such forward-looking statements. Should one or more
of the risks or uncertainties underlying such expectations not materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those we expect.
Factors that are not within our control which could contribute to such
differences and may have a bearing on operating results include demand for our
services and products, and our ability to meet that demand, which may be
affected by, among other things, competition, weather conditions and the
general economy, the availability and cost of labor, our ability to negotiate
favorably with lenders and lessors, the effects of terrorism and war, the
availability and cost of equipment, fuel and supplies, the market for
previously-owned equipment, the impact of changes in the tax and regulatory
environment in which we operate, operational risks and insurance, risks
associated with the technologies and systems used and the other risks and
uncertainties described elsewhere in our filings with the Securities and
Exchange Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
As of March 31, 2003, debt stood at $8 million, which approximated fair market
value.
We sponsor a Rabbi Trust for the benefit of participants in a
supplemental executive retirement plan. As of March 31, 2003, the trust held
about 169,000 shares of our stock. To the extent that trust assets are
invested in our stock, our future compensation expenses and pre-tax income will
reflect changes in the market value of our stock.
We own life insurance policies that have cash surrender value. The investment
returns earned by the insurance company serve to pay insurance costs and
increase cash surrender value, which is a key determinant of the amount that we
could receive pursuant to the policy as of the date of our financial statements.
Accordingly, changes in the market value of and returns from those investments
could impact the value of our life insurance policies.
We held no other material market risk sensitive instruments (for trading or
non-trading purposes) that would involve significant relevant market risks,
such as equity price risk. Accordingly, the potential loss in our future
earnings resulting from changes in such market rates or prices is not
significant.
Item 4. Controls and Procedures
-----------------------
Within 90 days prior to the date of filing of this report, we evaluated, under
the supervision and with the participation of our management, including the
Chief Executive Officer and the Chief Financial Officer, the effectiveness of,
the design and the operation of our disclosure controls and procedures pursuant
to Exchange Act Rules 13a-14 and 15d-14. Based on the evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective for the purposes of gathering, analyzing
and disclosing the information that we are required to disclose in the reports
we file under the Securities Exchange Act of 1934, within the time periods
specified in the SEC's rules and forms. There have been no significant
changes in our internal controls or in other factors that could significantly
effect internal controls subsequent to the date of the evaluation.
PART II - OTHER INFORMATION
Items 1 through 5 of Part II are omitted due to the lack of updated
information to disclose pursuant to said items.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
a. Exhibits
99.1 Certification of Chief Executive Officer
99.2 Certification of Chief Financial Officer
b. On February 18, 2003 we filed a current report on Form 8-K announcing
changes among our Board of Directors.
On March 11, 2003, we filed a current report on Form 8-K announcing our results
of operations for the three and twelve month periods ended December 31, 2002,
and also announcing adjustments to prior 2002 quarters.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of l934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Frozen Food Express Industries, Inc.
------------------------------------
(Registrant)
May 14, 2003 By: /s/Stoney M. Stubbs, Jr.
------------------------
Stoney M. Stubbs, Jr.
Chairman of the Board
and Chief Executive Officer
May 14, 2003 By: /s/F. Dixon McElwee, Jr.
------------------------
F. Dixon McElwee, Jr.
Senior Vice President
Principal Financial and
Accounting Officer
CERTIFICATION
Pursuant to Section 302 of the Sarbanes Oxley Act of 2002
I, Stoney M. Stubbs, Jr., certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Frozen Food Express
Industries, Inc.;
2. Based on my knowledge, this Quarterly Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Quarterly Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Quarterly Report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by those entities,
particularly during the period in which this Quarterly Report is
being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this Quarterly Report (the "Evaluation Date"); and
c) Presented in this Quarterly Report our conclusions about the effective-
ness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors(or persons performing the
equivalent function):
a) All significant deficiencies (if any) in the design or operation of
internal controls which could adversely affect the registrant's ability
to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
Quarterly Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 14, 2003
/s/ Stoney M. Stubbs, Jr.
- -------------------------
Stoney M. Stubbs, Jr.
Chairman of the Board and
Chief Executive Officer
See also the certification pursuant to Section 906 of the Sarbanes Oxley Act
of 2002, which is filed as Exhibit 99.1 with this report.
CERTIFICATION
Pursuant to Section 302 of the Sarbanes Oxley Act of 2002
I, F. Dixon McElwee, Jr., certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Frozen Food Express
Industries, Inc.;
2. Based on my knowledge, this Quarterly Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Quarterly Report;
3. Based on my knowledge, the financial statements, and other financial inform-
ation included in this Quarterly Report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this Quarterly
Report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its con-
solidated subsidiaries, is made known to us by those entities, par-
ticularly during the period in which this Quarterly Report is being
prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
Quarterly Report (the "Evaluation Date"); and
c) Presented in this Quarterly Report our conclusions about the effective-
ness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors(or persons performing the
equivalent function):
a) All significant deficiencies (if any) in the design or operation of
internal controls which could adversely affect the registrant's ability
to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
Quarterly Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: May 14, 2003
/s/ F. Dixon McElwee, Jr.
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F. Dixon McElwee, Jr.
Chief Financial Officer
See also the certification pursuant to Section 906 of the Sarbanes Oxley Act
of 2002, which is filed as Exhibit 99.2 with this report.